Tonight, President Obama and Republican nominee Mitt Romney will square off in Denver in the first presidential debate. In preparation, we’ve compiled some of our most relevant analyses of the economy and economic policy from the past few months:

BUDGET

• The so-called “fiscal cliff” isn’t one piece of take-it-or-leave-it legislation; rather, it’s a series of separable tax and spending provisions. Our experts identify which ones should be allowed to phase out (and perhaps be replaced by fiscal support that would more efficiently support economic recovery).
• States are facing $55 billion in budget shortfalls this year, and Romney’s proposed spending cap would decimate budgets further.
• Despite what Romney’s budget plan says, economic growth will come nowhere close to offsetting his proposed tax cuts for the wealthy.
• Would Romney or Obama do more to promote job growth in the near term? We analyze the macroeconomic impacts of both their budget proposals.
• Extending all of the Bush-era tax cuts will provide a massive windfall for the top 1 percent of households.

HEALTH CARE

• Obama’s Patient Protection and Affordable Care Act has increased employer-sponsored health insurance and dependent ESI coverage for young adults—even in a poor labor market.
• Paul Ryan, Romney’s running mate, has proposed a Medicare voucher that will shift around 11 percent of costs to seniors in 2023 (and even more in later years).

JOBS

• The economy would have added another million jobs in 2012 if Congress had fully enacted Obama’s American Jobs Act.
• More than three years after the end of the Great Recession, public-sector job loss resulting from state and local austerity continues to be a major drag on the recovery.
• The labor market’s struggles have meant declining wages and fewer opportunities for young graduates. Graduating in a bad economy also means long-lasting economic consequences for the Class of 2012.

Here’s some of the thought-provoking content that EPI’s research team enjoyed reading today:

• “Leaders at Work on Plan to Avert Mandatory Cuts” (New York Times)
• “The Policy Priorities and Issue Preferences of Asian Americans and Pacific Islanders” (National Asian American Survey)
• “Paul Ryan Was Never a Moderate on Social Security” (Huffington Post)
• “Congress just let the farm bill expire. It’s not the end of the world … yet” (Washington Post)
• “If Congress Goes Over the Fiscal Cliff Your Taxes Will Likely Go Up” (TaxVox)

My colleagues Josh Bivens and Andrew Fieldhouse recently released a report finding that Republican presidential nominee Mitt Romney’s budget plan would reduce employment by between 550,000 and 1.9 million jobs over the next two years relative to current policy, depending on whether his tax cut is deficit-financed or fully paid for with base-broadening. This job loss is overwhelmingly fueled by his proposal to cap federal spending at 20 percent of GDP.

But the impact of any fiscal plan goes beyond the job impact—after all, a little over 17 percent of non-interest federal spending flows directly to states (e.g., matching funds for Medicaid and unemployment insurance), and with a half trillion dollars in cumulative shortfalls that states have faced in the last few years and another $55 billion in shortfalls faced this year, states would have difficulty handling another blow to their budgets. So how would Romney’s proposed spending cap affect state budgets?

To make this calculation, I started with the U.S. Census Bureau’s Annual Survey of State Government Finances, which shows total expenditures and federal transfers to state governments, each by state. I then applied the Read more

Here’s some of the thought-provoking content that EPI’s research team enjoyed reading today:

• “The Real Referendum” (New York Times)
• “Obamanomics: A Counterhistory” (New York Times)
• “I am a job creator: A manifesto for the entitled” (Washington Post)
• “Payroll Tax Cut Is Unlikely to Survive Into Next Year” (New York Times)

Barry Commoner, path-breaking scientist and social activist, passed away yesterday at the age of 95. I was fortunate enough to work for Barry in the late 1970s as a research assistant on two of his books, The Poverty of Power (1976) and The Politics of Energy (1979). Commoner, a botanist and biologist, was a founder of the environmental movement, along with peers such as Rachel Carson (The Silent Spring, 1962) and Margaret Meade. He believed that scientists have an obligation to share scientific information with the general public to enable them to participate in public debate on scientific issues. His work on the effects of nuclear fallout, documented through the collection of baby teeth and reinforced by a petition signed by 11,201 scientists worldwide, provided the scientific foundation for the adoption of the Nuclear Test Ban Treaty of 1963.

Commoner also helped establish the roots of today’s BlueGreen Alliance of labor and environmentalists. He first began working with Tony Mazzocchi, a longtime leader of the Oil, Chemical and Atomic Workers in the 1950s, who collected baby teeth from the children of members of his Long Island local union. Commoner’s work showed the connections between the environmental crisis and social and economic issues such as “poverty, injustice, public health, national security and war,”  and that the roots of the environmental crisis lay in excessive corporate power and flawed systems of production. He argued that only by changing those systems—for example, by replacing nuclear power, coal and oil with renewable energy—could the root causes of our environmental problems be eliminated. Not coincidentally, these same policies would create millions of new domestic jobs, reducing pollution, inequality and our trade deficit simultaneously. As Commoner established in The Closing Circle (1971), the first of his “four laws of ecology” was, “Everything is connected to everything else.” Indeed.

As you head into your weekend, here’s some of the thought-provoking content that EPI’s research team came across today:

• Plan Selection in Medicare Part D: Evidence from Administrative Data (National Bureau of Economic Research)
• Will pension plans stage a comeback? (Investment News)
• Shocked by the [NFL] refs? Where’ve you been the last 30 years? (Philly.com)
• No, NFL Owners Didn’t ‘Lose’ The Lockout Battle With Referees (Think Progress)

How does government pay compare with that in the private sector? The answer is pretty much what you’d expect: Wages and salaries are lower, but benefits are better. Overall compensation is, if anything, slightly lower, though this varies by class of worker; less educated workers are better paid in the public sector and more educated workers are better paid in the private sector. This again is not surprising when you consider that less educated workers in the private sector often earn poverty wages with no health benefits and government employers have little incentive to shift costs onto Medicaid and other government programs.

But anti-government ideologues have deep pockets, so a minor industry has sprung up trying to show that government workers are overpaid. The latest report in this genre comes from Citizens Against Government Waste, and is typical of its kind. The research was done by an outfit called John Dunham and Associates, a.k.a. guerrillaeconomics.com. It shows many of the tell-tale signs of shoddy research:

1. Anecdotal evidence. Somewhere, there’s a government worker making an obscene amount of money and abusing the system. But focusing too much on specific examples is a sure sign they aren’t representative. The CAGW report claims the average San Diego firefighter makes more than $180,000 per yearRead more

A Bloomberg article from yesterday highlighted the fact that a trust set up by Mitt Romney to benefit his children and grandchildren relied heavily on tax loopholes for maximum returns. Romney was able to avoid gift and estate taxes by relying on a vehicle known as an “intentionally defective grantor trust,” or IDGT, which tax planners sometimes refer to as “I Dig It.” This type of trusts allow donors to gift unlimited amounts to their children and grandchildren free of gift or estate taxes (the top gift tax rate is scheduled to return to 55 percent in 2013, after being cut significantly by President George W. Bush). The value of the Romney family trust is not counted, according to the article, as part of the $250 million that Romney’s campaign cites as his net worth.

Tax avoidance such as this relies heavily on the preferential treatment of capital gains in the tax code. As the article highlights, when a trust such as the one set up by Romney sells assets at a profit, the donors are able to pay relatively low capital gains rates on behalf of the trust. A Tax Policy Center report earlier this year that looked at the distributional effects of tax expenditures found that “relative to the population as whole, high-income taxpayers would lose the most from eliminating special rates for capital gains and dividends.” Romney and his running mate Paul Ryan have ruled out closing this costly and lopsided loophole Read more

In a recent paper assessing the likely impact of President Obama and Mitt Romney’s budget plans if they became law, we applied standard macroeconomic multipliers to estimates of each plan’s fiscal impulse.

As always, the very term “multipliers” brings out critics, and the ones we used for this study (and have used often in the past)—those from Moody’s Economy.com—seem to bring out even more. This is all very odd.

We often use the Moody’s multipliers because they’re transparent and slightly more detailed than many others that have been published. But, what drives our results in determining whose budget plans provide a bigger economic boost is simply the relative ranking of these multipliers; specifically the estimate that tax cuts (particularly for high-income households) provide less dollar-for-dollar economic support than do spending increases. This is not controversial at all. Both the Congressional Budget Office and the Council of Economic Advisers make similar relative judgments (see the tables here), and the general view that government purchases’ multipliers will lie above tax multipliers during economic circumstances like the present is buttressed by a number of academic papers in recent yearsRead more

The recently released State of Working America, 12th Edition, documents in a variety of ways how the last decade in the United States has been a lost decade for all but the very well-off. One manifestation of this lost decade is the decline in the share of households owning stocks.

First, it’s useful to point out that even with the “401(k) revolution,” a surprisingly small share of households ever held any significant amount of stocks. As the figure shows, at its peak in 2001, just more than half (51.9 percent) of U.S. households held any stock, including stocks held in retirement plans like 401(k)s. Furthermore, many of that 51.9 percent held very small amounts—just over a third (37.8 percent) had total stock holdings of $10,000 or more. (Read this snapshot for more on the “democratization of the stock market” that never actually happened.) And even those modest shares have since lost ground. By 2010, less than half (46.9 percent) of all households had any stock holdings, and less than a third (31.1 percent) had stock holdings of $10,000 or more.

The strong rebound in stocks since 2009 amidst persistently high unemployment highlights the disconnect between Wall Street’s financial markets and most people. The stock market simply has little or no direct financial importance to the majority of U.S. households. Since 1989, the top fifth of households consistently held about 90 percent of stock wealth, leaving approximately 10 percent for the bottom four-fifths of households. If you want to assess how the economy is performing for most households in this country, don’t look to the stock market, look to the labor market, and measures of job opportunities like employment and wage growth.